Nordea Bank (OTCPK:NBNK.F) FY Conference Transcript

Summary of Nordea Bank FY Conference Call - September 08, 2025 Company Overview - Company: Nordea Bank (OTCPK:NBNK.F) Key Industry Insights - Bank Taxation: No significant political pressure for new bank taxes in Nordic countries, despite existing taxes in Sweden and higher corporate tax rates in Denmark and Norway [3][3] - Net Interest Income: Resilience observed in net interest margin, expected to stabilize around 2% in the coming years. Further rate cuts could be damaging [5][5] - Customer Behavior: Increased interest in deposits and asset management products as rates decline, indicating a shift in customer preferences [8][8] Financial Performance and Targets - 2025 Targets: Confident in achieving above 15% Return on Equity (ROE) and a cost-income ratio of 44% to 46% [4][4] - Loan and Deposit Growth: Strong competition in lending, with market share gains in Sweden, but challenges in Denmark due to aggressive competitors [6][6][36][36] Cost Management - IT Expenses: Elevated IT expenses due to significant investments in technology and risk management, with a commitment to cap cost growth at 2% to 2.5% for 2025 [14][15][19][19] - Employee Reduction: Anticipated reduction in full-time employees due to technology investments and automation in financial crime prevention [16][18][18] Asset Quality and Risk Management - Asset Quality: Robust asset quality with low incidence of specific provisions; no major areas of concern identified [20][20] - Regulatory Risks: Ongoing Danish AML court case expected to take nearly a year for resolution, with adequate provisions in place [22][22] Capital Strategy - M&A Activity: Interest in bolt-on acquisitions remains, particularly in banking portfolios and life insurance, but no acquisitions announced for the year [25][25][26][26] - Capital Returns: Focus on returning excess capital to shareholders through buybacks if no suitable investment opportunities arise [26][26] Future Outlook - Financial Targets: Upcoming Capital Markets Day expected to provide updates on financial targets and growth strategies [31][31][32][32] - Market Share Gains: Strongest performance in Sweden, with efforts to regain ground in Denmark and maintain growth in Finland and Norway [36][36][37][37] Conclusion - Overall Sentiment: Nordea Bank expresses confidence in meeting financial targets, maintaining asset quality, and strategically managing costs while exploring growth opportunities through acquisitions and market share expansion.